Kimberly-Clark Falls 3.3% Despite Q4 Earnings Beat

Kimberly-Clark Corporation (KMB) surpassed both earnings and revenue estimates in the fourth quarter of 2021. The company manufactures sanitary paper products and surgical & medical instruments. Shares of KMB fell 3.3% to close at $134.84 on October 26.

Net sales of $5 billion, during the quarter, came in above the Street’s estimate of $4.91 billion. Also, it increased 3% year-over-year on the back of higher revenues in Personal Care and K-C Professional segments. Organic sales were also up 3%, as net selling prices increased 2% and product mix increased sales by 1%.

Kimberly-Clark delivered an adjusted EPS of $1.30, a decline from $1.69 in the same quarter last year. However, it surpassed analysts’ expectations of $1.25. Operating profit declined to $521 million from $749 million last year.

Notably, Kimberly-Clark’s board of directors has approved a 1.8% increase in the dividend to $1.16 per share. The dividend will be payable on April 4, 2022, to stockholders of record on March 4, 2022.

The Chairman and CEO of Kimberly-Clark, Mike Hsu, said, “Looking ahead, we will continue to invest in innovation, supporting our brands, and accelerating topline growth. While we expect inflation and supply-chain disruption to persist into 2022, we are committed to recovering margins to pre-pandemic levels over time, and we are optimistic about gradual improvement later in the year.”

For full-year 2021, Kimberly-Clark reported has sales of $19.4 billion, up 2% year-over-year. Also, adjusted EPS of $6.18 declined 20% from $7.74 in 2020. The fall was mainly due to lower adjusted operating profit and net income from equity companies.

Outlook

For 2022, Kimberly-Clark projects net sales growth of between 1% to 2%. Organic sales are expected to rise by 3% to 4%. Further, operating profit is likely to fall low to mid-single digits percent, compared to adjusted operating profit in 2021. Earnings per share are projected to be in the range of $5.60 to $6 per share.

Kimberly-Clark is also targeting share repurchases of about $100 million and plans to incur capital spending of $1 billion to $1.1 billion.

Wall Street’s Take

Based on 1 Buy, 6 Holds and 2 Sells, the stock has a Hold consensus rating. The Kimberly-Clark stock price prediction of $141.88 implies 5.2% upside potential from current levels. Shares have gained 3.2% over the past year.

News Sentiment

News Sentiment for Kimberly-Clark is Positive based on 30 articles over the past seven days. About 80% of the articles have Bullish sentiment, compared to a sector average of 66%, and 20% have Bearish Sentiment, compared to a sector average of 34%.

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